Five Benefits of Pipeline Management
When running a business, it is crucial to incorporate competitive tools and strategies into your sales process. While your business may employ a skilled sales team, it is important to invest and support each individual’s efforts. This can be done by learning how to maximize pipeline management. Pipeline management describes the process of overseeing and directing future sales in various stages.
So what are the advantages of pipeline management? Overall, proper sales pipeline management helps you maximize your team and your resources by accurately forecasting sales, recognizing aggregate sales velocity, monitoring a team’s progress, and more. We explore this further this later on, but to understand pipeline management and how to reap its benefits, we have to understand first what a sales pipeline is and how it works.
What Is a Sales Pipeline?
A sales pipeline is a visual representation of the sales process; it is the set of stages a prospect passes through, as they progress from lead to customer. Unlike a sales funnel following the sale from the viewpoint of the prospect (who may or may not evolve into a customer), a sales pipeline focuses on the point of view of the sales rep.
It allows the sales rep to visualize what steps can be done at every stage. This helps simplify and streamline each complex stage a sales rep and team will encounter before closing a deal.
Sales pipelines differ based on industry and business, but common stages would include:
- Prospecting and Qualification: Before engaging with a potential customer, a sales rep must first identify if the prospect is part of the target market. Does the prospect have the need, the budget, or the authority to make a purchase?
- Interaction: At this stage, the sales rep can begin establishing rapport with a prospect by evaluating what the prospect needs and offering solutions that may address those needs.
- Proposal and Quotation: At this point, a sales rep may send a detailed proposal that convinces the prospect. The proposal can address concerns involving budget, deadline, expectations, and the like.
- Close: Once a proposal has been sent, a prospect may sign the contract and become a customer, or not. For some businesses, a sales rep may continue to keep in touch with a customer, if the aim is to retain them.
How Pipeline Management Can Boost Sales
When a business boasts amazing sales reps, they are focusing on individual efforts over team efforts. By creating a standard set of steps, sales teams can optimize their sales process to employ the best sales techniques for everyone.
Managing a sales funnel also makes room to improve its stages. In creating sales pipelines, a business can continually adopt sales techniques that work. If a technique like cold-calling is no longer effective, a sales pipeline will be able to tell you that.
Aside from making improvements, managers can also identify bottlenecks that keep the sales process from moving forward. A pipeline will show which “pipes” need to be replaced. By properly identifying which areas need change, you can run small experiments on these pipes in order to find the best solution.
An effective sales pipeline can help you distinguish active leads from dead leads as well. By looking at which leads progress from one stage to another, you can concentrate on the prospects willing to proceed to the next step instead of wasting your time on dead leads.
Another key insight that can be gleaned from the sales funnel is that you can learn which messages can and cannot convince prospects. Whether it’s the initial interaction that’s the problem or the proposal that needs work, a business can give more thought to their campaigns.
Five Benefits of Effective Pipeline Management
Creating a sales pipeline is just the tip of the iceberg. Without proactive management, it wouldn’t be as efficient. Consider optimizing your pipelines to get the most out of your resources.
Pipeline management gives sales teams a better idea of the quantity and quality of leads they have to usher through every stage of the sale. Aside from this, here are five other benefits you can reap from managing your pipeline effectively:
1) Forecast Sales Accurately
Sales pipeline metrics can paint an accurate picture of how many deals you can close based on how many prospects are currently in the pipeline. This makes it easier to give an estimate on how close the teams are to reaching their quota, and allows a business to establish target revenues, predict future sales slumps, and recognize new areas for growth.
2) Recognize Aggregate Sales Velocity
The aggregate sales velocity is the average time it takes for an incoming lead to become a customer. Aside from sales forecasting, sales pipeline management can help a business figure out the rate at which a sales rep can convert a prospect into a deal. Knowing the average conversion time for your customers is helpful when scheduling campaigns and projecting results. These numbers will also help you understand if your team is being efficient when it comes to converting interested leads to paying customers.
3) Monitor a Team’s Progress
With sales pipeline management, you can easily follow your sales team and see where they are achieving and what their pain points are. Team managers can then help the team members where they are weak, as well as amplify their efforts.
4) Stimulate Resource Allocation
Maximizing each sales stage also allows sales managers to determine the right resources to move a deal closer to the next step, as well as how much of this is needed. For example, a business can align the efforts of the sales and marketing teams. Rather than treating it as a competition, pipeline management can help boost synergy between the two, leaving additional resources and energy to be used elsewhere.
5) Nurture Leads
Utilizing data collected from a sales pipeline, it becomes much easier to nurture prospective customers through the stages of making a sale. Insights on the leads gives a sales rep more room to build more personalized interactions based on their needs, wants, and interests. The added bonus here is that sales reps can build rapport more naturally.
Four Principles of Pipeline Management
Setting more achievable goals and defining your priorities are at the heart of basic sales pipeline management. In order to support your team to move towards the next level, here are four principles in sales pipeline management that can guide you as you oversee your sales stages:
- Know when to purge your pipelines: Your pipeline can get littered with dead leads, so it’s important to know when to stop wasting your efforts. Some of them have been inactive longer than your sales cycle, and proper management can help you identify these leads. If you’re still unsure, then communicate with your potential buyers. This will help you move some prospects to the next stage. Some prospects may not be interested this month, but could be followed-up with and persuaded next month.
- Set the right targets and measure them: Specify what an improved close rate is for you. Once you’ve figured it out, plot it on the pipeline. Ask yourself: How much activity is happening in this stage? What are the activities happening here, and what are the appropriate actions to take that will help move prospects along? Figuring out what your targets are allows you to set a goal for your team, and keep track of what they are doing to meet this goal.
- Don’t be passive about your prospects: Even if your pipeline looks good, it’s important not to waste prospects by sitting on them. Take initiative and use this opportunity to try out new sales approaches. Think about what could be done differently, and set a deadline to see if this new approach works. Not only do you get a better understanding of what appeals to a customer, you also re-invigorate your team and spark their creativity.
- Compare with your ideal pipeline: Here’s a fun little experiment: create your ideal pipeline. What does it look like? What strategies are there at every step? What numbers are you looking for? Then compare this ideal with what you have. You may be able to find the weak gaps and empty stages that waste your resources. You can get a better grasp of how to manage the flow once you define your strengths and weaknesses. Listen to your data. It can tell you a lot.
Operating CRM For Sales Pipeline Management
Commence CRM software is the right partner for incorporating the concept of pipeline management into your sales process. You can effectively manage your pipeline with tools that allow you to manage sales opportunities, activities and more. Commence CRM software also gives you insights into existing customers and leads by breaking down and analyzing data.
With Commence CRM software, you can measure sales efficiency and manage your resources to ensure a smooth flow of operations. You can even acquire customized reports featuring your best practices and figure out what fits best with your business goals.
Let Commerce CRM help manage your sales pipeline while you focus on your business. Book a demo with Commerce CRM today.